Hemas posts 20 percent growth in profit for third quarter

Local conglomerate Hemas Holdings Limited (HHL) recorded 20 percent growth for the third quarter ending Dec 2006, to stand at Rs.718 million, Bartleet Mallory Stockbrokers reported.

The company saw an 18 percent increase in turnover to Rs.8.35million for the nine months compared to the corresponding period of last year, the report said.

“However the third quarter profit slipped 21 percent to Rs.207 million mostly due to poor performance,” it said, adding that the compay’s Fast Moving Consumer Goods (FMCG) sector continued to grow contributing Rs.104million for the quarter. The main brands in the Personal Care category, Baby Cheramy and Clogard continued to grow strongly in a highly competitive market and the company is striving to expand international business in the coming months. “With the intention of benefiting from tax incentives, the manufacturing facilities have been relocated to the Puttalam district and this is expected to be completed by the first half of next year,” report said. It added that healthcare contributed Rs.43million of the company’s profits, up 73percent and is set to grow further with HHL venturing to build a 100 bed hospital in Wattala by 2008, having identified the need for quality healthcare services outside Colombo.

The leisure recorded a turnover of Rs.132 million and a net loss of Rs.4million for the quarter, compared to a profit of Rs.13 million last year, as tourist arrivals saw a drop with most foreign travel advisories issuing travel warnings to Sri Lanka. “Power and transport generated profits of Rs.61 million and Rs.27 million respectively,” the report said adding that along with Aitken Spence, Hemas is one of the most undervalued counters in the Diversified sector that has a Price to Earnings ratio(PE) of 21.7 times.